Foreign Trade and Customs Regulations

Products and services may be imported freely into Hungary, subject to certain restrictions. Since Hungary’s accession to the European Union (1 May 2004) trade with other Member States takes place within the framework of the EU’s internal market, the main principles of which are the free movement of goods, services capital and persons.

Trade between the EU and third countries is also regulated by EU legislation, within the framework of the EU’s common commercial policy. Council Regulation (EC) No 3285/94 of December 1994 on the common rules for imports (Import Regulation) applies to products imported to the originating in third countries, except for textile products which are covered by special common rules and products originating in certain third countries listed in Council Regulation (EC) No 519/94 of March 1994.

According to the Import Regulation’s general rule, products can be freely imported into the EU and, accordingly, are not subject to any quantitative restrictions, without prejudice to the safeguard measures which may be taken under the Import Regulation. Safeguard measures may be applied when products are imported into the Community in such greatly increased quantities and/or such terms or conditions as to cause, serious injury to Community producers.

In addition, neither the EU rules on the internal market, nor the Import Regulation preclude the adoption or application by Member States of measures on grounds of public order, public morality, public security, the protection of health and life of humans, animals and plants, the protection of national treasures, the protection of industrial and commercial property, and special formalities concerning foreign exchange.

Under Hungarian law, Government Decree No 52/2012 (III.28) on the Trade of Goods, Services and Rights of Material Value Traversing the State and Customs Frontier(Trade Decree) provides for certain exceptions from the EU free trade rules set out above. According to this decree, export or import transactions of certain products require a license from the Hungarian Trade Licensing Office

http://www.mkeh.hu, e.g. transactions with armaments, radioactive materials, recyclable or harmful waste, parts or derivatives of endangered animal and plant species, devices used in surveillance, and military engineering defence technology.

Since 1991 freight forwarding and international transportation can be practised without any special licensing or reporting obligation. The National Transport Authority (www.nkh.hu), acting under the auspices of the State Secretariat for Infrastructure, Ministry for National Development, is responsible for issuing licences for actors of the transport and logistics business.

As for agricultural legislation, it should be noted that Hungary now falls under the very detailed European agricultural legal system and the Common Agricultural Policy (CAP). Other important regulations with respect to drugs (including psychotropic drugs), chemicals, waste, and nuclear products are contained in the decrees of the competent ministers.

Anti-dumping regulations

Since Hungary’s EU accession, EU anti dumping regulations have been applicable, the main source of which is Council Regulation (EC) NO 384/96 of 22 December 1995. The intention of the Anti Dumping Regulation is to protect the EU against imports dumped from third countries, and its application is based on two conditions: (i) the existence of dumping; and (ii) the proof of injury to the Community industry, be it injury caused to an industry established in the Community, the threat of injury, or substantial retardation of the establishment of such and industry.

Quotas and other non-tariff barriers

Council Regulation (EC) No 520/94 of 7 March 1994 (Quota Regulation) established a Community procedure for administering quantitative quotas. The Quota regulation applies to import and export quotas, whether autonomous or conventional, established by the Community.

The Quota Regulation does not apply to agricultural products listed in Annex II in the Treaty of Rome, to textile products, or to products covered by special import rules which state specific provisions for the administration of quotas.

The Commission will publish a notice in the Official Journal of the European Union which will announce the opening of quotas, set the allocation method, the conditions to be met by license applications, time limits for submitting them, and a list of the competent national authorities to which they must be sent. Quotas shall be allocated among applicants as soon as possible after they have been opened.

Quotas may be administered by one of the three methods set out in the Quota Regulation, i.e. (i) the

method based on traditional trade flows; (ii) the method based on the order in which applications are submitted; and (iii) the method of allocating quotas in proportion to the quantities requested, by a combination of these methods, or by any other appropriate method.

Foreign Exchange

The foreign exchange authority is the National Bank of Hungary (www.mnb.hu). Former restrictions relating to transactions in foreign exchange and foreign currency were mostly repealed with the enactment of a series of laws, the latest being the Act XCIII of 2001 on Foreign Exchange Liberalisation which provides that the transactions and acts of foreign residents and foreign non-residents performed with foreign currency, Hungarian currency and claims in Hungarian currency may be freely pursued. Notwithstanding the general rule, the Liberalisation Act states that payment obligations in respect of tax, contributions and other fees to the Hungarian state must be fulfilled in the Forints. Furthermore, other laws continue to contain certain obligations affecting foreign exchange transactions (regulations on money laundering, supplying data for statistical purposes to the National Bank of Hungary, etc.)

Companies doing business in Hungary must open a bank account at a Hungarian bank. Companies engaged in foreign-trading activities may also open foreign-currency accounts in Hungary. Foreign-currency receipts, such as receipts derived from the export of goods and loan proceeds, may be deposited in such accounts.

Hungarian legislation allows dividend remittances and, as applicable, capital repatriation to the foreign investor. The Forint is converted at the foreign-exchange rate set by commercial banks.